Reduced VAT

Austrian Reduced VAT rate increase

Austrian Reduced VAT rate increase

As part of their 2016 budget Austria have proposed a reduced VAT rate hike raising it from 10% to 13% for the majority of supplies, this is expected to come into force on 1st January 2016, the list of supplies included in this VAT hike are:

Cultural events, including entrance to public museums and galleries

• Livestock and seeds
• Hotels (applies later in 2016)

Whilst staying at 10% will be:

• Supplies of food
• Pharmaceutical products

Romania’s potential new reduced VAT rate & the success of the food VAT rate drops

Romania potential new reduced VAT rate & the success of the food VAT rate drops

Romania’s Lower House of Parliament has approved plans to introduce a new reduced rate of VAT to 5% for cultural services, lower value houses and printed media. The new 5% VAT rate would apply to books, newspapers, magazines, and tickets to museums, monuments, cultural events, cinemas and sporting events.

More approvals from the Upper House of Parliament still need to be received before this reduced VAT rate can be introduced.

Romania’s recent success

Romania has recently seen success in lowering the tax rate on food products by 15% (see previous eBiz Answers post). From this they have seen an increase of 17% in the number of products sold in the first 2 weeks, compared to figures from last year, with coffee seeing the biggest increase in sales, going up 25%. Overall sales were 12% higher than in May and 17% higher than June 2014.

Romania to cut VAT on food products to 9%

Food chain welcomes early cut on VAT

Romania will cut value added tax (VAT) for all food products to 9% from 24% starting on the 1st of June 2015, six months earlier than planned as budget revenue is higher than expected, after cutting budget deficit to 1.8% of GDP last year from 7.2% in 2009 by a series of measures including cuts in state salaries, limits in public employment and tax hikes, the Romanian Government has announced.

The law extends the scope of the reduced VAT rate to food, including beverages but excluding alcoholic beverages, animals, and live poultry from domestic species, seeds, plants, and ingredients normally used in food preparation, and also restaurant and catering services, excluding sales of alcoholic beverages. Applying the cut to the whole food chain makes it easier to manage. Continue Reading

Austrian budget announces increased reduced rate

Austrian budget announces increased reduced rate

Austria has announced that it will increase its reduced rate of 10% to 13%. Most goods and services – including livestock, seeds, cultural services, museums, zoos and hotels – will see the rate go up to 13%, from the current 10%. However Pharmaceuticals and food will still be subject to the 10% rate, essentially meaning that they will have two reduced rates.

The changes will take effect from 1 January 2016; VAT on hotel accommodation will increase from either 1 April or 1 May 2016.

The change was announced in Austria’s 2016 budget, precise details of the Budget measures are not yet known, it is expected that certain anti-fraud measures will also be introduced; mandatory electronic cash registers for small businesses, as well as other unspecified measures to combat VAT fraud in general and specifically in the case of distance sales.